Election Day and holidays signal Sydney home auction winter freeze

The typical mid-winter freeze in home auction activity will be enhanced this weekend with buyers and sellers clearly distracted by Federal Election Day and the beginning of school holidays.   

Fewer than 200 homes are likely to go under the hammer on Saturday which will be well below last weekend’s strong June offering of 631 and the 550 auctioned over the same weekend last year. 

Saturday’s auction numbers will be similar to the 212 listed over the last Federal Election Day on Saturday 7 September 2013.

Sydney’s upper north shore will host the highest number of auctions this weekend with 31 followed by the city and east with 26, the inner west 25, the lower north 23, the northern beaches 18, the south 17, the south west 14, Canterbury Bankstown 12, the west nine, the north west seven and the central coast with six auctions.

Eastwood is the most popular suburb in Sydney for auctions on Saturday with five, followed by Lane Cove North, Marsfield and Mosman each with four, and a number of suburbs with three auctions scheduled including St Ives, Strathfield, Marrickville, Dee Why and Miranda.

The Sydney home auction market tracked backwards last weekend and although still clearly a positive seller environment overall, signs are emerging of a usual mid-winter freeze in activity.

Sydney recorded a clearance rate of 74.1 per cent which was well down of the 78.3 per cent recorded over the previous weekend and also below the 82 per cent reported over the same weekend last year.

Regional results generally continued the recent pattern of higher results from inner-city, higher-priced regions although clearance rates in these areas were down compared to recent weeks reflecting perhaps the start of the private school holiday period. Canterbury Bankstown, however, produced yet another boom-time result last weekend in what continues an exceptionally strong local market for sellers.

High auction numbers and the beginning of some school holidays likely contributed to the lower result and it is highly unlikely the turmoil on markets to due to the Brexit vote result had – or will have – any influence on market outcomes. 

Underlying demand for housing remains strong in Sydney with latest ABS data reporting total net migration into NSW of 59,619 over 2015. Although 4.6 per cent lower than the 2014 result it was nonetheless the second highest annual total for the state since 2008.

Auction activity in Sydney will typically track backwards over July with the usual mid-winter hiatus set to subdue the market. The local market however remains well positioned for an early spring revival driven by low and falling interest rates.

Although the Reserve Bank remains unlikely to cut official rates at its regular monthly meeting next week despite concerns in some quarters over Brexit – a cut sooner rather than later remains on the cards. 

Dr Andrew Wilson is Domain Group’s chief economist

Twitter @DocAndrewWilson

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